(Reuters) — The number of Americans filing new claims for unemployment benefits fell last week, pointing to moderate job growth despite slowing economic activity.
Initial claims for state unemployment benefits declined 11,000 to a seasonally adjusted 346,000, the U.S. Labor Department said on June 6. Claims for the prior week were revised to show 3,000 more applications received than previously reported.
Economists polled by Reuters had expected first-time applications to fall to 345,000 last week.
A Labor Department analyst said no states had been estimated and there was nothing unusual in the state-level data. Last week's data included the Memorial Day holiday and claimstypically fall around this time of the year.
The four-week moving average for new claims, which irons out week-to-week volatility, rose 4,500 to 352,500. Although claims have been volatile in recent weeks, there is
little in the numbers to suggest a shift in the moderate pace of job gains, even though the broader economy is struggling under the weight of higher taxes and deep government spending cuts.
Last week's data has no bearing on data the government will release on June 7 on employment in May, given that it falls outside of the survey period for the monthly jobs tally.
Employers are forecast to have added 170,000 jobs to their payrolls last month, slightly up from April's 165,000 count, according to a Reuters survey of economists. The unemployment rate is seen holding at an almost 4.5 year low of 7.5 per cent.
There is a risk, however, that job gains could have been less than expected in May. Reports from the Institute for Supply Management showed a measure of employment in the services sector hit a 10-month low in May, while a gauge of factory jobs slipped a bit.
In addition, the ADP National Employment Report showed private hiring in May fell well below expectations.
The labour market is being closely watched for clues to when the Federal Reserve might start scaling back its expansive monetary stimulus.
Fed Chairman Ben Bernanke said last month a decision to start scaling the $85 billion in bonds the U.S. central bank is buying each month could come at one of its "next few meetings" if the economy appeared set to maintain momentum.
The Fed next meets on June 18-19, but economists agree the economic signals are not yet strong enough to lead it to taper its purchases at that meeting.
The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell 52,000 to 2.95 million in the week ended May 25. The four-week average for the so-called continuing claims was the lowest since May 2008.
Despite the slowdown in growth momentum, companies are not responding by reducing their workforces.
In a separate report, outplacement firm Challenger, Gray and Christmas said the number of planned layoffs at U.S. firms fell in May for the third month in a row.
Employers announced 36,398 job cuts last month, down 4.5 per cent from April.
Layoffs were down 41.2 percent from a year ago.
© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.